The Central Power Distribution Company of Andhra Pradesh Limited (APCPDCL) floated Short Tender Notice dated 11.04.2012 stating that it and the other Distributing Companies (DISCOMs) intended to purchase upto 2000 MW power per month on short-term basis between June, 2012 and May, 2013 from various trading licensees/State utilities/Captive Power Plants (CPPs)/ Distribution Licensees/State Electricity Boards. Each bidder was required to submit an undertaking from the generator that he was with the bidder and had not quoted with any other trader. The ‘Conditions for Evaluation’ in the tender notice provided for constitution of a Committee by the DISCOMs for negotiation and evaluation of the bids. The Annexure to the tender notice reflected that the ‘source of power, i.e., the name of the source’ was to be disclosed by the bidder. The ‘Guidelines for short-term (i.e. for a period less than or equal to one year) Procurement of Power by Distribution Licensees through Tariff based bidding process’ published by the Ministry of Power, Government of India, in the Gazette of India (Extraordinary) in May, 2012, make it clear that the tariff quoted by the bidders should be constant and there should be no escalation during the contractual period. However, if bids were invited for different time slots, the tariff could be different for each such slot. Guideline No.10.4 therein provides that if the quantum of power procured and the tariff determined are within the blanket approval granted by the Appropriate Commission in the Annual Revenue Requirement (ARR) of the respective year, then the same would be considered to have been adopted by the Commission. It is only in other cases that the procurer is required to submit a petition to the Commission for adoption of the tariff within two days from the signing of the Power Purchase Agreement (PPA) and the Commission is to communicate its decision within seven days thereafter. These guidelines were issued by the Government of India in exercise of the powers conferred by Section 63 of the Electricity Act, 2003 (for brevity, ‘the Act of 2003’). National Energy Trading & Service Limited, Gurgaon, the first petitioner in W.P.No.4118 of 2013, and GMR Energy Trading Limited, Bangalore, the second petitioner in W.P.No.4163 of 2013, responded to the above tender notice and submitted their bids. These two companies are electricity traders licensed under Section 14(c) of the Act of 2003. ‘Trading’, as defined by Section 2(71) of the Act of 2003, means purchase of electricity for resale thereof. National Energy Trading & Service Limited, Gurgaon, purchases power from Lanco Kondapalli Power Limited, Hyderabad, the second petitioner in W.P.No.4118 of 2013, a generating company/Independent Power Producer (IPP), which has a generating station at Kondapalli in Ibrahimpatnam Mandal of Krishna District. Therein, it established a 368.144 MW power project initially in Stage-I and thereafter, a 366 MW power project in Stage-II. These power projects are operated on natural gas. The first and second petitioners in W.P.No.4118 of 2013 entered into an agreement on 19.10.2009 whereby the power produced by the second petitioner from its Stage-II project was to be sold to the first petitioner trading licensee, which would in turn sell it to the APCPDCL. Significantly, the second petitioner has no medium term or long term PPA with the APCPDCL or any other DISCOM. The first petitioner submitted its bid to the APCPDCL offering to sell on short-term basis 125 MW power, purchased by it from the second petitioner, at Rs.5.99 paise per KWH. Thereafter, on revision/negotiation of the price, the APCPDCL finally issued purchase order/Letter of Intent (LoI) dated 31.05.2012 to the first petitioner for supply of 125 MW power on firm basis from 01.06.2012 to 30.05.2013 at Rs.5.51 paise per KW H. The source of the power was indicated as LKPPL-II, the unit of the second petitioner. This purchase order was issued subject to approva